German business confidence rose for a third month as falling energy costs and anticipation of more European Central Bank (ECB) stimulus helped lift optimism about an economic recovery.
The Ifo institute’s business climate index, based on a survey of 7,000 executives, advanced to 106.7 this month from 105.5 last month. The median estimate of 38 economists in a Bloomberg News survey was for an increase to 106.5.
Germany, Europe’s largest economy, should benefit from plunging oil prices that free up more disposable income in a country where unemployment is already at a record low. In addition, exporters stand to gain from a slide in the euro that’s bound to extend after the ECB announced massive monetary stimulus for the single-currency area last week.
“Lower oil prices are conducive for the euro-area economy, and therefore also for Germany,” said Evelyn Herrmann, an economist at BNP Paribas SA in London.
“Indicators suggest momentum will pick up, putting Germany ahead of the currency region once again,” she said.
The Bundesbank said in its monthly bulletin on Monday last week that the German economy “seems to have overcome the weak phase of early last year faster than many expected.”
The Federal Statistics Office predicts the economy grew a quarter of a percent in the October-December period after effectively stagnating in the middle of last year. Purchasing managers’ indexes last week showed growth picking up momentum.
Even so, the German central bank said it must reduce its inflation forecasts “significantly” because of the drop in oil prices. The inflation rate probably turned negative this month for the first time in more than five years, according to a separate Bloomberg survey before data due on Thursday.
Consumer prices are already falling in the euro area, leading to concern among ECB policymakers that the region could be tipped into a deflationary spiral.
ECB President Mario Draghi said that prompted last week’s decision to start a bond-buying program worth at least 1.14 trillion euros (US$1.28 trillion) over the next one-and-a-half years.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts